Zamzung is a large technological firm that produces, among other things, microchips. The CD division of...

  

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Zamzung is a large technological firm that produces, among other things, microchips. The CD division of Zamzung produces and sells three types of chips directly to the market: a high-performance chip, Talkalot (TL), and two older products called Talkoften (TO) and Talknot (TN). These three products have the following costs per unit: CD Costs per unit Direct materials Direct labor Manufacturing overhead TN Machine hours per unit $2.00 $3.00 $2.00 $3.00 TO TN Manufacturing overhead in the CD is all allocated fixed costs. All three chips are essentially CPUs that need to be produced using a chip-printing machine with a total capacity of 8,000 machine hours (mhrs) a year. The required machining times per chip are: 0.10 $4.00 $3.00 $1.00 $3.00 $5.00 TL TO 0.20 TL 0.80 The current market price for the TL is $18 per chip with a maximum external demand of 6,000 units per year. The maximum external demand for the TO is 15,000 units and it is sold at $9 per unit. The maximum external demand for TN is 30,000 units and it is sold at $8 per unit. Zamzung is a large technological firm that produces, among other things, microchips. The CD division of Zamzung produces and sells three types of chips directly to the market: a high-performance chip, Talkalot (TL), and two older products called Talkoften (TO) and Talknot (TN). These three products have the following costs per unit: CD Costs per unit Direct materials Direct labor Manufacturing overhead TN Machine hours per unit $2.00 $3.00 $2.00 $3.00 TO TN Manufacturing overhead in the CD is all allocated fixed costs. All three chips are essentially CPUs that need to be produced using a chip-printing machine with a total capacity of 8,000 machine hours (mhrs) a year. The required machining times per chip are: 0.10 $4.00 $3.00 $1.00 $3.00 $5.00 TL TO 0.20 TL 0.80 The current market price for the TL is $18 per chip with a maximum external demand of 6,000 units per year. The maximum external demand for the TO is 15,000 units and it is sold at $9 per unit. The maximum external demand for TN is 30,000 units and it is sold at $8 per unit.

Answer rating: 100% (QA)

ANSWER To solve this problem we need to find the optimal product mix that maximizes the total contribution margin for the CD division Given informatio... View the full answer